Installed Base of VR Headsets to Reach 81M By 2020: Forecast

Thanks in part to the rise of smartphone-powered virtual reality platforms such as Google’s just-announced Daydream View, the installed base of VR headsets will soar from 4 million in 2015 to 81 million in 2020, IHS Technology predicts.

On the higher end of the VR headset spectrum, IHS also expects Sony’s PlayStation VR platform (for PS4 consoles) to outsell the two main PC-connected platforms – the Oculus Rift and HTC Vive – in 2016. This year, IHS Technology forecasts that PlayStation VR will sell 1.4 million headsets, and generate $134 million in spending on VR entertainment, versus $69 million for PC-based headsets.

However, mobile VR headsets, such as the Oculus-powered Samsung Gear VR and Daydream View, will nab the biggest share. IHS sees smartphone VR headsets representing 87% of the market’s installed base by the end of 2016.

On the mobile side, IHS expects the Gear VR to have the largest installed base of all major branded headsets with 5.4 million this year, but expects the Daydream View to “slowly disrupt Samsung’s dominant market position” and become the most popular headset for VR by 2019.

IHS also expects consumers to spend $1.6 billion on VR headsets this year, bolstered by more expensive platforms like the Oculus Rift, HTC Vive and Sony PS VR.

“Smartphone VR headsets will represent the largest addressable market for VR content because of cheaper pricing,” Ian Fogg, senior director at IHS Technology, said in a statement. “The smartphone VR base will be a major opportunity for VR content experimentation

“Smartphone VR headsets’ share of the VR installed base will be 87 percent at the end of 2016.”

However, the firm also expects higher-end VR headsets to dominate content monetization, with IHS predicting that consumer spending on VR entertainment will hit $3.3 billion by 2020, up from a mere $310 million in 2016.

“There will be a polarization of the VR market between lower volume premium VR headsets, which will have strong paid content conversion rates, and higher-volume cheaper smartphone VR headsets, which will monetise content at a lower rate,” Piers Harding-Rolls, director of games analysis at IHS Technology, noted. “A $3.3 billion VR entertainment market by 2020 will represent less than 1 percent of overall entertainment spending worldwide.”